Nine months. That’s how long it took Congress to pass a second round of legislative relief in response to a global pandemic recession. In the interim, the economy imploded, the death toll reached and then surpassed 300,000, millions were pushed into poverty, and millions more lost their jobs. None of which stopped Mitch McConnell from sounding downright triumphant on Sunday as he announced the deal. “At long last, we have the bipartisan breakthrough the country has needed,” he said from the Senate floor. “I hope we can do this as promptly as possible.”
After putting their heads together, Chuck Schumer, Nancy Pelosi, Kevin McCarthy, and Mitch McConnell arrived at a $900 billion deal that is both late and inadequate. A half measure of a half measure—the deeply flawed $2.2 trillion Cares Act was a short-term salve—the new bill will leave those who need the most help living week to week, and it does little to address the financial gaps or exploitative labor practices that the pandemic has magnified. On the evening news and in the papers of record, the bill has been called a compromise; in truth, it’s closer to a betrayal.
As expected, the package includes $300 in weekly unemployment benefits for 11 weeks; extended benefits for gig and contract workers; nearly $300 billion for small businesses; a one-month extension of the eviction moratorium and $25 billion in rental assistance; just over $80 billion for schools; and onetime $600 stimulus checks for adults making under $75,000, with an additional $600 for child and adult dependents.
Both the stimulus payment and the unemployment enhancement are half of what the legislature provided through the Cares Act, which itself wasn’t enough: Eight million Americans have slipped into poverty since its aid dried up. Congress also failed to include retroactive payments for the months during which the initial round of federal unemployment benefits expired. As Politico reported earlier in the week, this was all done “in order to keep the cost of the bill in check,” despite the fact that the money is very much available. America needed a bigger boat, and Congress tossed a pair of arm floaties.
The most alarming part of the new agreement is the lack of state and local government funding. Across the nation, state governments are struggling to operate in the wake of the past year of economic turmoil.
From The Washington Post:
The bill lacks new money for state and local governments. Democrats had initially pushed for $1 trillion in aid to state and local governments. Mayors and governors have been sounding alarms over budget shortfalls and the hard choices they may be forced to make without help from Washington. States that rely heavily on the tourism or energy industries have suffered some of the hardest hits and are warning of tax hikes, public-sector layoffs or spending cut to public programs.
The move by McConnell is in service of the austerity politics he loves so much. It manages both to feed partisan hatred—No blue-state bailout!—and starve red states that are hurting just as badly. It is, for a ghoul like McConnell, a win-win.
For the past week, Democratic leaders have been signaling that they were willing to drop the state and local aid portions of the bill. The aid was part of a negotiated swap between Democrats and Republicans, with McConnell agreeing to drop a clause that would have granted companies liability protections from Covid-related lawsuits. Without federal support, state and local governments are going to be painfully constrained in their budgets in the coming years. That means major cuts and possibly a recession.
In New York, the Metropolitan Transportation Authority is facing an $8 billion deficit between 2022 and 2024. In Alaska, the Anchorage School District is staring down a $28 million shortfall. Ann Arbor, Michigan, is trying to figure out how to navigate its own depleted tax revenues, with current plans including an indefinite hike on water rates. When Honolulu council member Tommy Waters pressed the city’s budget specialist to see how short it would be on property taxes, he was stunned by the response he got: “Four hundred million? Oh my God.” Even in the short-term pandemic response, it’s still unclear how many states will be able to fund vaccination distribution without further assistance from the federal government. As The American Prospect’s David Dayen pointed out in August, these funds wouldn’t necessarily have to come from Congress. The Federal Reserve still has the power to issue zero-interest loans to all cities and counties, but the pressure has not yet been put on the Fed to do so.
The terms of the game were set back in March. The failures present here all trail back to the decision to give in to McConnell’s demands at the start of the pandemic. Republicans have long signaled their willingness to let people die or starve, and Democrats blew an early opportunity to pass a more robust package. Months passed. People died. Others suffered hunger pangs and the threat of losing their homes. Now we’re here, not much better off.